Re: Care fee`s and the sale of a home


"Norman Wells" <norman@xxxxxxxxxxxxxxxxx> wrote in message
news:fs6a81$ig2$1$8302bc10@xxxxxxxxxxxxxxxxxxx
Everyone can predict that at sometime in their life, they are
likely
to need to see their GP, go into hospital, or otherwise use NHS
services.

However, the need for care during one's later
years is clearly foreseeable,

Course it isn't. Not everyone needs care in their old age.

But a lot do. The risk is appreciated by everyone, and is therefore
clearly
foreseeable.

As is the risk of needing to see a GP. Should that be charged? Or
should there be some complex means test?

and I think that should come from a person's
reserves and assets if they have them, including their house if
necessary,
which they won't be needing.

In other words, people should be encouraged to spend all their
money
while they are healthy, then rely on the taxpayer to pay for any
care
costs.

That's the situation at present, isn't it? It's undesirable, but I
don't
see how it can be avoided, except by making the level of the safety
net not
the most desirable way of spending your later years. There have to
be
incentives of better care for those who do prepare for their own
future.

So people should save just in case they have to go into a care home?
And those who haven't will get slightly worse care homes? What if they
die before they need a care home? Why should they save just in case?

To simplify things, say 50% of people have saved £200,000 for their
care home fees and the other 50% haven't saved anything. Say that 50%
of people actually end up needing a care home. Say the total care home
cost pp over the rest of their life is £200,000 for the superior
self-paid care home and £160,000 for the state care home.

So we have:

25% die before needing a care home with £200,000 in their estate.

25% die leaving nothing.

25% need a care home and spend their £200,000 savings paying for it.

25% need a care home and it's paid for by the state. Cost to the state
£160,000.

So the average cost to the taxpayer is £40,000 per person.

So what if we now decide that the superior care home fees would be
paid by the state regardless and with no means testing? The average
cost to the taxpayer would become £100,000 per person, so on average
each person would have to pay £60,000 extra in taxes in their
lifetime.

BUT, they wouldn't need to save anything to pay care home fees, would
they? So those who saved £200,000 will now either have an extra
£140,000 to enjoy in their earlier life, or would be confident in
being able to leave £140,000 to their kids when they die.

This effectively *forces* those who can afford to save to do so,
consider the extra taxation as compulsory care home savings. It also
benefits those who could never afford to save enough for the superior
care home. The losers are those who were wasteful and didn't save when
they could afford to do so, and to a lesser extent the beneficiaries
of the estates of those who did save but died before they needed a
care home (but this is balanced by those who did need a care home and
had savings being able to leave an inhertitance).

--
Andy


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